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Thursday 26 June 2003
EU agrees radical farm reform
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Over-production has been blamed for causing the EU's food mountains
European Union agriculture ministers have agreed radical reforms to the controversial system of paying subsidies to farmers.
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FACTS

The basic cost of running the Common Agricultural Policy will remain unchanged at about 30 billion a year - half the entire cost of the EU budget.

In future farm subsidies will be closely linked to environmentally-friendly farming methods.

Individual countries will be able to keep some of the food subsidies to avoid farmers abandoning the land.

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The biggest shake-up ever in European agriculture has been agreed by EU agriculture ministers.

A deal to make the controversial Common Agricultural Policy fairer, simpler and more environmentally friendly was thrashed out after talks in Luxembourg.

No longer will farmers be paid for their production, regardless of market conditions.

The subsidies they do get will be closely linked to environmentally-friendly farming methods.

The sweeping reforms of the Common Agricultural Policy bring "real change" for farmers and consumers, said Environment Secretary Margaret Beckett.

"This agreement delivers what we want," said Mrs Beckett, "real change".

The breakthrough deal comes after three weeks of talks, which led to the watering down of the original proposals.

Margaret Beckett
"This agreement delivers what we want": Margaret Beckett
The compromise deal will abolish most of the subsidies that reward farmers according to how much food they grow.

But individual countries will be able to keep some of the food subsidies to avoid farmers abandoning the land.

The original plan was to get rid of all payments that encourage over-production and are blamed for causing the EU's food mountains.

But France and some other countries have insisted on the changes as the price for making an agreement.

'Fundamental change'

Margaret Beckett said the key had been breaking the link between subsidies and production, and putting farmers back in touch with their markets.

Breaking the link was crucial, after years in which surpluses of unwanted food had built up because farmers received their EU payments whether or not consumers wanted their produce.

Then the EU had to pay more money to "dump" the unwanted food on third markets, angering Europe's hard-pressed trading partners.

The subsidies have been the key sticking point in agreeing the next round of global trade talks.

Other countries, including Australia, the US and much of Africa, say it is unfair to ask them to open their markets while the EU is protecting its own agriculture business.

"This is a historic turning point in the Common Agricultural Policy, " said NFU President Sir Ben Gill. "But as ever the devil is in the detail.

"Because so many options have been given to member states we could end up with a patchwork of different policies operating across Europe - which could lead to market distortions."

The basic cost of running the Common Agricultural Policy will remain unchanged at about £30 billion a year - half the entire cost of the EU budget.

But the money will be distributed more evenly, giving poor farmers a better deal and rewarding those who switch to farming methods which bring down costs.



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